ANNUAL
REPORT
FOR THE YEAR ENDED
31 MARCH 2021
ABN 18 124 462 82 6
0
CONTENTS
CORPORATE DIRECTORY .................................................................................................................. 2
REVIEW OF OPERATIONS ................................................................................................................. 3
DIRECTORS’ REPORT ...................................................................................................................... 11
AUDITORS’ INDEPENDENDENCE DECLARATION ............................................................................ 17
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........ 18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................. 20
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 21
CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................. 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................ 24
DIRECTORS’ DECLARATION ............................................................................................................ 51
INDEPENDENDENT AUDITOR’S REPORT ........................................................................................ 52
ADDITIONAL SECURITIES EXCHANGE INFORMATION AS AT 1 JUNE 2021 ..................................... 55
CORPORATE DIRECTORY
SHARE REGISTRY
Computershare Investor Services Pty Ltd
GPO Box D182
Perth WA 6841
AUSTRALIA
Tel: +61 8 9323 2000
AUDITORS
Bentleys Audit & Corporate (WA) Pty Ltd
Level 3
216 St Georges Terrace
Perth WA 6000
AUSTRALIA
SOLICITORS TO THE COMPANY
Steinepreis Paganin
Level 4
The Read Buildings
16 Milligan Street
Perth WA 6000
AUSTRALIA
WEBSITE
www.trekmetals.com.au
DIRECTORS
Tony Leibowitz
John Young
Neil Biddle
Non-Executive Chairman
Executive Director
Non-Executive Director
COMPANY SECRETARY
Bermuda
Apex Corporate Services Ltd.
Vallis Building, 4th Floor
58 Par-la-Ville Road
Hamilton HM 11
Bermuda
Australia
(Local Agent and Company Secretary)
Russell Hardwick
REGISTERED OFFICE OF INCORPORATION
Trinity Hall
43 Cedar Avenue
Hamilton HM 12
BERMUDA
REGISTERED OFFICE – AUSTRALIA
130 Stirling Highway
North Fremantle WA 6159
AUSTRALIA
Tel: +61 8 6215 0371
POSTAL ADDRESS
Locked Bag 4
North Fremantle WA 6159
AUSTRALIA
TREK METALS LIMITED | ANNUAL REPORT 2021
2
REVIEW OF OPERATIONS
The year to 31 March 2021 delivered a significant change of direction for Trek Metals Limited (“Trek”
or “the Company”), with the Company securing an exciting new exploration and growth opportunity
in the Pilbara region of Western Australia through the acquisition of a highly-prospective portfolio of
gold and base metal exploration assets.
Trek entered into a Binding Term Sheet to acquire unlisted Australian exploration company ACME
Pilbara Pty Ltd (APP) in July 2020 and, following the completion of due diligence programs, exercised
its option to complete the acquisition in August 2020.
The APP acquisition has resulted in Trek obtaining 100% ownership of the strategically-located
Pincunah and Jimblebar gold and base metal projects, covering an aggregate area of 267km2 in the
Pilbara region.
The Pincunah Gold Project is located 70km west of Marble Bar and includes tenements located near
significant established gold and base metal deposits. The Jimblebar Gold Project includes a
greenstone-scale exploration opportunity within a historical goldfield. Both projects include
prospects for gold and base metal mineralisation and numerous drill targets and exploration
opportunities, with virtually no exploration undertaken in modern times.
Following completion of the acquisition, Trek commenced initial reconnaissance fieldwork programs
at both Jimblebar and Pincunah, with these programs returning positive results and confirming
strong prospectivity for gold mineralisation. The fieldwork programs comprised mapping and
sampling programs across both project areas and included the reprocessing of geophysical data to
assist with geological interpretation.
This work delivered a series of maps that combined airborne magnetic and radiometric data, as well
as aerial photography, topography and processed satellite imagery. In combination with historical
drilling results, these maps were then used to prioritise targets for sampling programs and later
interpretation.
In January 2021, Trek further expanded its portfolio with the acquisition of 100% of the Tambourah
Project (E45/5484), covering the central portion of the 15km long Western Shaw greenstone belt
and including numerous gold and base metal targets. The acquisition also included an option to
acquire tenement E45/4960, as well as the possibility of acquiring a third licence, ELA45/5722, which
is currently in a ballot with two other companies.
PINCUNAH PROJECT
Work programs undertaken at the Pincunah Project included a detailed soil sampling program
comprising 993 soil samples and 103 rock chip samples at the Valley of the Gossans Prospect, where
extensive evidence of hydrothermal alteration has been observed over an area of 2.2km by 0.9km.
Results from this program identified a regionally extensive coincident As-Sb-Ag-Se anomaly that is
variably coincident with Au-Co-Mo and Bi that extends for 2.1km and up to 500m width. The anomaly
trends north-west and remains open to the south-east and north-west.
This association generally represents a suite of “granitic-felsic” elements commonly associated with
porphyry-style emplacement. Importantly, this anomaly is associated with the regional topographic
highs related to the mapped ‘chert’ across the project area.
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During the field trip, outcrops of this ‘chert’ horizon were visually inspected and two samples were
taken. Assays did not return elevated gold, however they returned highly anomalous arsenic up to
3,600ppm, silver up to 13ppm, copper up to 600ppm and bismuth up to 0.4ppm.
Field observations indicate that this horizon is a very large and regionally extensive zone of
hydrothermal alteration which we now know is elevated with unusually high levels of classic
pathfinder metals and gold.
The newly identified As-Sb-Ag-Se+/-Au anomaly appears to be associated with highly gossanous and
silicified rocks located 200-300m west of the main area of gossans. These rocks were sampled by
Trek in August 2020, returning assay results of up to 0.4g/t Au and 57g/t Ag (see TKM ASX
announcement dated 30 September 2020).
This area represents a high-priority target that has never been drill tested. On review of the newly
reprocessed geophysical images, the As-Sb-Ag-Se+/-Au anomaly is strongly coincident with
regionally extensive potassium trends in the airborne radiometric data (Figure 2).
Due to the strength of the As-Sb-Ag-Se anomaly, and the fact that it remains open to the northwest,
the soil program was extended to join with the historical Carlindi soils to the north (see Figure 2).
Initial samples are being taken on a 200m by 100m pattern, with some in-fill planned on the western
side of the VOG trend.
CARLINDI PROSPECT
At the Carlindi prospect area, the historical soil data collected by Lynas in 1997 was reviewed. Two
north-northeast trending gold-in-soil anomalies of >20ppb Au that extend for 1.5km and 500m
respectively are both open and occur on the western edge of another regionally extensive potassium
anomaly (Figure 2).
Field inspections across these areas indicate variably gold-bearing hydrothermal chert horizons and
silicified conglomerate with quartz veins and gossan and high grades in places, including a quartz
vein sample that retuned 9.7g/t Au up-dip, which backs up the significant high-grade drilling
intersection of 10m at 5.9g/t Au (see announcement dated 5 August 2020).
In addition, previous rock samples by Trek to the south of the area drilled by Lynas returned assays
of up to 1.8g/t Au that have not been followed up by drilling (see TKM ASX announcement dated 30
September 2020).
Significantly, this chert horizon and coincident potassium trend extends for 6km to the north-west
and is also coincident with the Mt York deposit owned by Kairos (Figure 2).
TREK METALS LIMITED | ANNUAL REPORT 2021
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Figure 1: Arsenic anomaly on aerial photography showing the relationship to historical drilling and recent rock chip
samples.
The north-northwest trending Gossan B outcrops occur on the edge of the geochemical anomaly and
rock sampling in that area returned assays of up to 0.8g/t gold, 2,231g/t silver, 14.7% copper,
>10,000ppm As and 109ppm bismuth (Figure 2).
On review of the re-processed geophysical images, the As-Sb-Ag-Se anomaly is strongly coincident
with regionally extensive potassic trends in the airborne radiometric data (Figure 2).
The radiometric potassium trends extend for at least 2km and possibly up to 5km to the northwest
up to the northern property boundary toward the Kairos Mt York resource (Figure 2). This trend
indicates that the silicification is strongly associated with extensive potassic alteration and is
regionally extensive on Trek Licence E45/4909.
TREK METALS LIMITED | ANNUAL REPORT 2021
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Figure 2: Aeromagnetic Radiometric image (K: pink, U: blue, Th: Green) showing the location of the 2020 Trek and
historical Lynas 1997 soil surveys and significant anomalies, as well as some relevant highlight drill and rock sample
results. Completed IP lines are shown in blue
IP SURVEY
In March 2021, Zonge Pty Ltd completed four dipole-dipole traverses of 1.7km each over the main
target areas at VOG and Carlindi. All four section lines have a significant chargeability results from
the ‘inversion’ data (‘inversion’ meaning what the sub-surface conductivity would most likely look
like from computer modelling of the electrical measurements received on the ground).
In all cases there appears to be a chargeable IP anomaly either underlying or directly adjacent the
chert marker ridge, each of which represent a drill target in themselves.
TREK METALS LIMITED | ANNUAL REPORT 2021
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A drilling program is planned to commence during the second quarter 2021 once the current and
proposed programs have been completed and interpretation finalised.
JIMBLEBAR PROJECT
At the Jimblebar Project, an initial site visit by a Trek geologist has led to the identification of an area
of extensive gold shafts and workings on an expired mining lease that occurs over a strike length of
at least 300m along an east-west trend (Figure 3). This highly prospective prospect area has been
named Stu’s Find.
Eleven rock samples were taken from outcrop and mullock at the Stu’s Find gold workings with nine
of these rock samples returning gold assays above 0.3 g/t (Table 1). High-grade results from separate
samples included up to 4.0 g/t gold, 3.9 % copper and 30 g/t silver as well as other pathfinder metals
up to 25 g/t molybdenum and 1136 ppm bismuth.
Sampling at the Pilliwinkle prospect also returned anomalous gold results, with the best result from
a gossanous and quartz-veined banded iron formation (BIF) sample which returned an assay of 3.2
g/t Au. The Pilliwinkle samples are also highly anomalous in pathfinder metals, returning values of up
to 40 ppm molybdenum and 175 ppm bismuth.
These initial results from Jimblebar are highly encouraging, with extensive gold mineralisation and a
similar metal association that occur primarily within the intermediate volcanic rocks in close
proximity to the contact with chert and BIF at both Stu’s Find and Pilliwinkle.
Figure 3: Interpreted simplified bedrock geology map at Jimblebar showing the area of significant assay results from the
recent reconnaissance work.
Bonanza gold intersections also occur along strike to the north of Pilliwinkle at the Sunny South
prospect (not on Trek’s license), where drilling by Warwick Resources returned high grade gold up to
24m at 9.4g/t Au from 20m in WRKRC6 including 4m at 53.8g/t Au. Mineralisation at Sunny South is
hosted in dacite (intermediate) intrusive rocks, similar to the host rocks at the Sunrise Dam and
Granny Smith deposits in the Yilgarn Craton (see ASX Announcement 5 August 2020).
TREK METALS LIMITED | ANNUAL REPORT 2021
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Based on the results received to date, Trek has completed an updated bedrock geology map which,
together with reprocessed airborne magnetic data, indicates there may be 5.5km strike of the highly
prospective rocks on Trek’s licence. Further fieldwork will be undertaken to assess this potential.
Detailed soil sampling is planned at Stu’s Find to map the mineralised trend under cover to the west,
where a number of branching structures have been identified in magnetic data. An Induced
Polarisation (IP) survey may also be conducted over selected soil anomalies to define drill targets.
This work will commence shortly after the grant of the license.
TAMBOURAH PROJECT
The Tambourah Project is considered highly prospective for gold deposits with at least 13 known
gold occurrences and old mining workings located on the project. The Project encompasses the
central portion of the 15km long Western Shaw Greenstone Belt, which occurs on the eastern limb
of an anticline folded around the Tambourah Dome. The greenstone rocks comprise Archean-aged
metavolcanic, metasedimentary and various granitoids that occur as large plutons and smaller
intrusives.
Field reconnaissance work was completed on E45/5484 as part of the due diligence process for the
Tambourah Project acquisition with the collection of 41 rock samples and a number of outcropping
highly gossanous quartz veins identified together with highly gossanous and often pyrite-bearing
mafic and chert host rocks (see ASX Release 21st February 2021).
The results received are encouraging and significant results are listed below:
• WS2 Prospect rock sample RT015 assayed 3.0 g/t Au;
• WS3 Prospect rock samples RT003 assayed 3.6 g/t Au and RT005 assayed 2.5 g/t Au;
• Elevator Prospect rock sample RT026 returned 1.5 g/t Au.
KROUSSOU PROJECT - GABON
The Kroussou Zinc-Lead Project consists of prospecting licence G4-569 which covers an area of
986.6km2 in the Ngounie Province of western Gabon, located approximately 220km south-east of
the capital city of Libreville.
In September 2019, the Company entered into an earn-in agreement (“EIA”) with Apollo Minerals
Limited (Apollo Minerals, ASX: AON) for Apollo to earn an interest of up to 80% in the Kroussou
Project. Apollo is now the manager of the Kroussou Project and will determine all exploration
programs and other activities to advance the project moving forward.
LAWN HILL PROJECT – NORTHERN TERRITORY
The Company continued to pursue Native Title discussions to move towards having the tenements
for its Lawn Hill Project in the Northern Territory granted. The evaluation of historical data shows the
existence of cobalt, copper, zinc and lead anomalies. These anomalies are along strike from the
Walford Creek Copper‐Cobalt‐Zinc‐Lead Project (Aeon Metals Limited, ASX: AML).
CORPORATE
BOARD CHANGES
Trek Metals completed a restructure of its board and management team during the reporting period,
with the appointment of prominent Australian mining executives Mr Neil Biddle and Mr Tony
Leibowitz to its board. Mr Leibowitz was appointed Non-Executive Chairman while Mr Biddle was
appointed as a Non-Executive Director.
TREK METALS LIMITED | ANNUAL REPORT 2021
8
Concurrent with the appointment of Mr Leibowitz and Mr Biddle to the board, Mr Greg Bittar and
Mr Michael Bowen stepped down from the board. In addition, Trek also appointed highly-
experienced mining executive Mr John Young as an Executive Director to lead the Company’s
exploration program.
Messrs Young, Biddle and Leibowitz were all founding Directors of Pilbara Minerals, and worked
closely together through the acquisition, exploration, funding and development of the world-class
Pilgangoora lithium-tantalum project which has since cemented its position as a Tier-1 global hard
rock lithium project.
They subsequently collaborated on the repositioning of Spitfire Materials as an Australian gold
explorer and a series of corporate deals and acquisitions which led to its transformation into
emerging mid-tier gold developer Bardoc Gold.
ACQUISITION OF ACME PILBARA PTY LTD
During the reporting period, Trek completed due diligence and exercised its option to acquire ACME
Pilbara Pty Ltd (“APP”), providing the Company with ownership of a highly prospective portfolio of
gold projects in the Pilbara region of Western Australia.
The total acquisition cost comprised:
1. $200,000 in cash;
2. The issue of 6,666,667 fully paid ordinary shares in Trek at a deemed issue price of $0.03,
which was completed pursuant to the Company’s existing Listing Rule 7.1 placement
capacity; and
3. A 1% net smelter royalty.
TAMBOURAH PROJECT ACQUISITION
In January 2021, Trek Metals entered into three separate agreements to expand its exploration
portfolio in the Pilbara region of Western Australia through the acquisition of highly prospective gold,
base metal and iron ore opportunities.
The acquisition agreements remain subject to the completion of due diligence, with further details
provided in the Company’s ASX Announcement dated 6 January 2021.
CAPITAL RAISINGS
The Company completed a share placement in July 2020 comprising 28,571,429 shares at an issue
price of $0.035 per share to sophisticated and professional investors to raise a total of $1 million.
The proceeds from the placement were used for completion of due diligence exploration at the
Pincunah and Jimblebar Projects and for corporate and general working capital.
In January 2021, Trek undertook a strongly supported capital raising of A$3.05 million to accelerate
exploration across its key Pilbara gold and base metal projects in Western Australia. The placement
comprised the issue of 50,833,333 shares at an issue price of $0.06 per share to sophisticated and
professional investors. Trek Metals’ Chairman, Tony Leibowitz, subscribed for $350,000 under the
placement, with his application approved by shareholders at a general meeting held on 4th March
2021.
Funds raised are being used to ramp-up exploration activity at the Pincunah and Tambourah projects
and for general working capital.
TREK METALS LIMITED | ANNUAL REPORT 2021
9
FINANCIAL REVIEW
The Group incurred a loss for the year of US$196,588 (2020 Loss: US$2,413,892). Significant
expenditure items during the period include:
•
•
•
•
•
Exploration and evaluation expenditure impaired of US$ Nil (2020: US$2,035,696);
Exploration and evaluation expenditure expensed of US$22,341 (2020: US$44,311);
Directors and Consulting Fees of US$183,983 (2020: US$144,679);
Foreign exchange (profit)/loss of (US$311,485) (2020: US$128,133), and
Share based payment of US$37,501 (2020: US$70,415).
The group began the year with US$1,336,325 in cash and ended the year with US$3,591,604 in cash.
Subject to the disclosures elsewhere in this report, the Directors believe the Group is in a stable
financial position to continue to explore its projects and to identify new opportunities within the
resources sector.
Lastly, I would like to thank all our staff, consultants and stakeholders for their ongoing efforts on
behalf of the Company and look forward to progressing our projects to create value for shareholders.
John Young
Executive Director
15 June 2021
COMPETENT PERSONS STATEMENT
The information in this report relating to Exploration Results and Mineral Resources is based on
information compiled by, Mr John Young, a competent person, who is a Member of the Australian
Institute of Mining and Metallurgy. Mr Young has sufficient experience relevant to the style of
mineralisation and to the type of activity described to qualify as a competent person as defined in
the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves.” Mr Young has disclosed to the Company that he is a shareholder, option holder
and Rights holder in the Company. Mr Young consents to the inclusion in this announcement of the
matters based on his information in the form and content in which it appears.
TREK METALS LIMITED | ANNUAL REPORT 2021
10
DIRECTORS’ REPORT
The Directors present their report and the audited financial statements of Trek Metals Limited
(“TKM”, “Trek” or the “Company”) and its controlled entities (“Group”) for the year ended 31 March
2021.
PRINCIPAL ACTIVITIES
The principal activities of the Company and its subsidiaries (“the Group”) is to progress the
exploration of its mineral properties and to identify suitable acquisitions in the mineral resources
sector.
RESULTS AND DIVIDEND
The loss for the Group for the year ended 31 March 2021 was US$196,588 (31 March 2020:
US$2,413,892). The Directors do not recommend the payment of a dividend.
DIRECTORS’ AND SENIOR MANAGEMENT
The following persons held office as directors during the financial year and to the date of this report.
Directors were in office for the entire period and to the date of this report unless otherwise stated:
Name, qualifications
and independence
status
Tony Leibowitz
Non-Executive
Chairman
Appointed 4
September
2020
Experience, special responsibilities and other Directorships in listed entities
Experience
Mr Leibowitz has over 30 years of corporate finance, investment banking and
broad commercial experience and has a proven track record of providing the
necessary skills and guidance to assist companies grow and generate sustained
shareholder value. Previous roles include Chandler Macleod Limited and
Pilbara Minerals Limited, where as Chairman and an early investor in both
companies, he was responsible for substantial increases in shareholder value
and returns. Mr Leibowitz was a global partner at PricewaterhouseCoopers and
is a Fellow of the Institute of Chartered Accountants in Australia.
Special responsibilities
None
Directorships held in other listed entities during the three years prior
to the current year
Ensurance Limited
Bardoc Gold Limited
Greenvale Mining Limited
TREK METALS LIMITED | ANNUAL REPORT 2021
11
Neil Biddle
Non-Executive
Director
Appointed 4
September
2020
Experience
Mr Biddle is a geologist and Corporate Member of the Australasian Institute of
Mining and Metallurgy and has over 30 years’ professional and management
experience in the exploration and mining industry. Mr Biddle was a founding
Director of Pilbara Minerals Limited, serving as Executive Director from May
2013 to August 2016, serving as a Non-Executive Director from August 2016 to
26 July 2017. Throughout his career, Mr Biddle has served on the Board of
several ASX listed companies, including Managing Director of TNG Ltd from
1998 - 2007, Border Gold NL from 1994 - 1998 and Consolidated Victorian
Mines from 1991 – 1994.
Special responsibilities
None
Directorships held in other listed entities during the three years prior to the
current year
Bardoc Gold Limited
Greenvale Mining Limited
John Young
Experience
Executive
Director
Appointed 2
September 2019
Mr Young has a Bachelor of Applied Science (Geology) and is a member of
AusIMM. Mr Young is a highly experienced geologist who has worked on
exploration and production projects encompassing gold, uranium and specialty
metals, including tungsten, molybdenum, tantalum and lithium.
Mr Young’s corporate experience includes appointments as Chief Executive
Officer of Marenica Energy Limited and CEO and Director of Thor Mining PLC.
Mr Young was Pilbara Minerals Exploration Manager from June 2014 until
August 2015, appointed Technical Director in September 2015 and transitioned
to Non-Executive Director in July 2017 until his resignation in April 2018. Mr
was also the Managing Director of Bardoc Gold Limited from May 2017 to April
2019 and remains a Non-Executive Director. Mr Young is also a Non-Executive
Director of AIM listed Mosman Oil and Gas and Chairman of ASX Listed Rarex
Limited.
Special responsibilities
None
Directorships held in other listed entities during the three years prior
to the current year
Pilbara Minerals Limited (resigned 20 April 2018)
Mosman Oil & Gas Limited
Rarex Limited
Bardoc Gold Limited
Gregory Bittar
Non-executive Chairman (resigned 4 September 2020)
Michael Bowen
Non-executive Director (resigned 4 September 2020)
TREK METALS LIMITED | ANNUAL REPORT 2021
12
COMPANY SECRETARY(S)
•
•
Australia - Russell Hardwick – Local Agent and Joint Company Secretary
Bermuda – c/o Apex Corporate Services Limited
CORPORATE GOVERNANCE
The directors of the Group support and adhere to the principles of corporate governance, recognising
the need for the highest standard of corporate behaviour and accountability. During the year the
company adopted a revised Corporate Governance plan taking into account the 4th edition of the
Corporate Governance Principles and Recommendations. Please refer to the Corporate Governance
Statement on the Company’s website https://trekmetals.com.au/corporate/corporate-governance.
BOARD MEETINGS
The Directors held twelve (12) meetings during the year. The following table shows their attendance
at Board meetings:
Name
Tony Leibowitz
Neil Biddle
John Young
Gregory Bittar
Michael Bowen
No. of meetings attended
5
4
10
7
7
Eligible to attend
5
5
12
7
7
In addition, a number of matters were approved by circular resolution signed by all Directors.
BOARD COMMITTEES
The Company does not have an Audit, Remuneration or Nomination Committee. Given its size and
composition, the Board considers that at this stage, no efficiencies or other benefits would be gained
by establishing separate board committees. To assist the Board to fulfil its function it has adopted
charters for each of these committees. In accordance with the Company’s Board Charter, the Board
carries out the duties that would ordinarily be carried out by the Audit, Remuneration and
Nomination Committees under the charters in place for each of these.
DIRECTORS’ SHARES, RIGHTS AND OPTION HOLDINGS
NUMBER OF SHARES HELD BY DIRECTORS:
The number of ordinary shares in Trek Metals Limited held by each Director of the Group during the
financial year is as follows:
31 March 2021
Balance 1 April
2020
Options/ Rights Received
as compensation
Exercised
Net Change
Other
Balance
31 March 2021
Tony Leibowitz
Neil Biddle
John Young
Greg Bittar*
Michael Bowen*
11,195,215
10,052,857
6,030,000
4,801,785
6,189,285
*Both Mr Bittar and Mr Bowen resigned on 4 September 2020, the amounts noted in the table above represent holdings at date of
resignation.
2,827,075
10,052,857
3,500,000
4,087,500
5,475,000
8,368,140
-
2,530,000
714,285
714,285
-
-
-
-
-
TREK METALS LIMITED | ANNUAL REPORT 2021
13
31 March 2020
Gregory Bittar
Michael Bowen
John Young*
Bradley Drabsch
Sonja Neame
Balance 1 April
2019
Options/ Rights Received
as Compensation
Exercised
Net Change
Other
Balance
31 March 2020
587,500
475,000
-
1,437,500
-
-
-
-
-
-
3,500,000
5,000,000
3,500,000
-
-
4,087,500
5,475,000
3,500,000
1,437,500
-
ANALYSIS OF PERFORMANCE RIGHTS HELD BY DIRECTORS PERFORMANCE RIGHTS HELD BY KE
MANAGEMENT PERSONNEL
The number of performance rights held by each Director of the Group during the financial year is as
follows (2020 Nil):
31 March 2021
Tony Leibowitz
Neil Biddle
John Young
Greg Bittar*
Michael Bowen*
Balance 1
April 2020
Granted as
Compensation
Vested during
the year
Exercised
during the
year
Balance
31 March 2021
Vested and
Exercisable
-
-
-
-
-
3,000,000
3,000,000
6,000,000
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
6,000,000
-
-
-
-
-
-
-
*Both Mr Bittar and Mr Bowen resigned on 4 September 2020, the amounts noted in the table above represent holdings at date of
resignation.
NUMBER OF OPTIONS HELD BY DIRECTORS
The number of options over ordinary shares held by each Director of the Group during the financial
year is as follows:
31 March 2021
Tony Leibowitz
Neil Biddle
John Young
Greg Bittar*
Michael Bowen*
Balance 1 April
2020
Other changes
during the year
Total Exercisable
31 March 2021
Balance
31 March 2021
-
-
1,875,000
3,625,000
3,500,000
1,500,000
500,000
-
-
-
1,500,000
500,000
1,875,000
3,625,000
3,500,000
1,500,000
500,000
1,875,000
3,625,000
3,500,000
*Both Mr Bittar and Mr Bowen resigned on 4 September 2020, the amounts noted in the table above represent holdings at date of
resignation.
31 March 2020
Gregory Bittar
Michael Bowen
John Young
Bradley Drabsch
Sonja Neame
Balance 1 April
2019
Other changes
during the year
Total Exercisable
31 March 2020
Balance
31 March 2020
2,000,000
1,906,250
-
3,593,750
1,187,500
1,625,000
1,593,750
1,875,000
(1,156,250)
-
3,625,000
3,500,000
1,875,000
2,437,500
1,187,500
3,625,000
3,500,000
1,875,000
2,437,500
1,187,500
TREK METALS LIMITED | ANNUAL REPORT 2021
14
DIRECTORS’ AND SENIOR MANAGEMENT REMUNERATION
The Board of Directors is responsible for determining and reviewing compensation arrangements for
the directors and the senior management. The Board assesses the appropriateness of the nature
and amount of remuneration of non-executive directors and executives on a periodic basis by
reference to relevant employment market conditions. The Company recognises that it operates in a
competitive environment and to operate effectively it must be able to attract, motivate and retain
key personnel. The compensation structures are designed to attract suitably qualified candidates,
reward the achievement of strategic objectives, and achieve the broader outcome of creation of
value for shareholders. The compensation structures take into account:
•
•
•
•
The capability and experience of the key management personnel;
Size of the Group;
The key management personnel’s ability to control the performance; and
The Group’s exploration success and identification of new investments.
Salaries and fees paid to Directors have been determined in relation to salaries paid to comparable
companies, management responsibility and experience. The salaries and fees are reviewed annually
to ensure that Directors are appropriately rewarded for their efforts in enhancing shareholder value.
Where required, the Board obtains independent advice as required on the appropriateness of
compensation packages of the Company given trends of comparative companies and the objectives
of the Company’s compensation strategy.
The Board policy is to remunerate Non-Executive Directors at market rates for time, commitment
and responsibilities. Directors may also provide consultancy services to the Company and are
remunerated at market rates.
On 4th March 2021, shareholders approved a new Incentive Performance Rights and Option Plan
(“Plan”) and the participation by Directors in that plan. Key management personnel are also entitled
to participate in the plan. Any rights or options issued are valued using standard valuation techniques
such as Black-Scholes methodology or Binomial.
The objectives of the Plan is to reward Directors and senior management in a manner that aligns
remuneration with the creation of shareholder wealth. The amounts disclosed as part of
remuneration for the financial year have been determined by allocating the grant date fair value
based on the probability of the vesting conditions being achieved over the life of the rights or options.
The remuneration policy has been tailored to increase goal congruence between Shareholders,
Directors and Executives. As part of each of the key management personnel’s remuneration package,
there is a performance-based component consisting of the issue of share rights or options to
encourage the alignment of management and Shareholders’ interests. The Board determines
appropriate vesting conditions that includes specific milestones and/or a premium over the
prevailing share price to provide potential rewards over a period of time and to align interests with
shareholders.
A summary of the operating losses and share prices at year end for the last four years are as follows:
Net Profit/(Loss)
Share price at year end
Earnings per share
Post consolidation (8:1)
2019
2018
($888,008)
($1,478,351)
2020
($2,413,892)
2021
($196,588)
$0.184
(3.79c)
$0.04
(1.88c)
$0.014
(1.71c)
$0.063
(0.09c)
TREK METALS LIMITED | ANNUAL REPORT 2021
15
Remuneration earned and the value ascribed to share based payments which vested during the year
ended 31 March 2021 in relation to Directors and Senior Management is summarised as follows:
2021
Tony Leibowitz(1)
Neil Biddle(1)
John Young
Gregory Bittar(2)
Michael Bowen(2)
Directors/
Consulting Fees
US$
Super
US$
Other
Benefits
US$
Options/Rights
Granted
US$
Total
Remuneration
US$
29,175
23,340
111,340
48,688
39,223
251,766
2,772
2,217
-
-
-
4,989
46,844
19,266
10,953
-
-
77,063
78,791
44,823
122,293
48,688
39,223
333,818
-
-
-
-
(1) Mr Leibowitz and Mr Biddle were both appointed on 4 September 2020.
(2) Mr Bittar and Mr Bowen both resigned on 4 September 2020.
Directors
Fees
US$
Consultancy
Fees
US$
Other
Benefits
US$
2020
Gregory Bittar
Michael Bowen
John Young (1)
Bradley Drabsch (2)
Sonja Neame (2)
49,339
23,355
23,184
28,878
-
124,756
(1) Mr Young was appointed on 2 September 2019.
(2) Mr Drabsch and Ms Neame both resigned on 2 September 2019.
-
-
19,923
-
-
19,923
Options
Granted
US$
10,051
10,051
20,160
-
-
40,262
-
-
-
-
-
-
Total
Remuneration
US$
59,390
33,406
63,267
28,878
-
184,941
POST BALANCE DATE EVENTS
On 20 April 2021, the Company issued 100,000 full paid ordinary shares in the capital of the Company
pursuant to the exercise of unlisted options.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company and/or Group are important. Should
the Group engage the auditor for non-audit related services; the provision of the non-audit services is
compatible with the general standard of independence for the auditors imposed by the Corporations
Act 2001.
During the financial year ended 31 March 2021 the group’s auditors Bentleys provided the Group with
minor non-audit related services.
Signed on behalf of the Board.
John Young
Executive Director
15 June 2021
TREK METALS LIMITED | ANNUAL REPORT 2021
16
To The Board of Directors
Auditor’s Independence Declaration
As lead audit Partner for the audit of the financial statements of Trek Metals Limited for
the financial year ended 31 March 2021, I declare that to the best of my knowledge and
belief, there have been no contraventions of the auditor independence requirements of
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
CHRIS NICOLOFF FCA
Partner
Dated at Perth this 15th day of June 2021
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
YEAR ENDED
31 MARCH 2021
US$
YEAR ENDED
31 MARCH 2020
US$
NOTES
Continuing Operations
Investment revenue
Other income
Share based payment expense
Exploration expenses
Impairment of capitalised Exploration &
evaluation expenditure
Foreign exchange gain/(loss)
Gain on sale of subsidiaries
Other operating expenses
Loss before tax
Income tax expense
Loss for the year
6
6
22
11
23
6
8
10,352
-
(37,501)
(22,341)
-
311,485
-
(458,583)
6,069
391
(70,415)
(44,311)
(2,035,696)
(128,133)
282,207
(424,004)
(196,588)
(2,413,892)
-
-
(196,588)
(2,413,892)
Attributable to:
Equity holders of the Parent
Loss per share for loss attributable to the
ordinary equity holders of the Parent:
Basic loss per share
Diluted loss per share
7
7
(196,588)
(2,413,892)
Cents/share
Cents/share
(0.09)
(0.09)
(1.71)
(1.71)
Notes forming part of these financial statements are included on pages 24 to 50.
TREK METALS LIMITED | ANNUAL REPORT 2021
18
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
YEAR ENDED
31 MARCH 2021
US$
YEAR ENDED
31 MARCH 2020
US$
NOTES
Loss for the year
(196,588)
(2,413,892)
Other comprehensive income/(loss)
Items that may be reclassified to profit or
loss
Exchange differences arising on translation
of foreign operations
Items that have been recycled to profit or
loss
Exchange differences realised on disposal of
foreign operations
Total Comprehensive Loss for the Year
Attributable to Owners of the Company
162,975
(26,957)
-
(172,399)
(33,613)
(2,613,248)
Notes forming part of these financial statements are included on pages 24 to 50.
TREK METALS LIMITED | ANNUAL REPORT 2021
19
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 31 MARCH 2021
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current Assets
Property, plant and equipment
Exploration and evaluation expenditure
Other assets
Total non-current assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provision
Total current liabilities
Total Liabilities
NET ASSETS
Equity
Capital and reserves
Issued capital
Reserves
Accumulated loss
Total Equity
31 MARCH 2021
US$
31 MARCH 2020
US$
NOTES
9
10
11
14
15
16
17
3,591,604
40,966
5,953
3,638,523
60,655
1,560,805
913
1,622,373
1,336,325
10,775
10,301
1,357,401
6,656
610,200
857
617,713
5,260,896
1,975,114
211,610
2,557
214,167
70,355
58,819
129,174
214,167
129,174
5,046,729
1,845,940
27,103,743
38,344,597
(60,401,611)
5,046,729
26,154,711
35,896,252
(60,205,023)
1,845,940
Notes forming part of these financial statements are included on pages 24 to 50.
TREK METALS LIMITED | ANNUAL REPORT 2021
20
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
Consolidated
Note
Issued Capital
US$
Share Premium
Reserve
US$
Share Based
Payments Reserve
US$
Foreign Currency
Translation Reserve
US$
Accumulated
Losses
Total Equity
US$
US$
Balance at 1 April 2020
26,154,711
34,891,858
1,094,311
(89,917)
(60,205,023)
1,845,940
Loss for the year
Other comprehensive
income/(loss)
Total comprehensive loss
for the year
Transactions with owners,
recorded directly in equity
Issue of ordinary shares
Share based payments
Share issue expenses
Balance at 31 March 2021
-
-
-
-
-
-
1,163,561
2,165,671
22
-
(214,529)
27,103,743
-
-
37,057,529
-
-
-
-
119,699
-
1,214,010
-
(196,588)
(196,588)
162,975
-
162,975
162,975
(196,588)
(33,613)
-
-
-
-
-
-
3,329,232
119,699
(214,529)
73,058
(60,401,611)
5,046,729
Notes forming part of these financial statements are included on pages 24 to 50.
TREK METALS LIMITED | ANNUAL REPORT 2021
21
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
Consolidated
Note
Issued Capital
US$
Share Premium
Reserve
US$
Share Based
Payments Reserve
US$
Foreign Currency
Translation Reserve
US$
Accumulated
Losses
Total Equity
US$
US$
Balance at 1 April 2019
24,757,035
34,741,556
1,023,896
109,439
(57,820,494)
2,811,432
Loss for the year
Other comprehensive
income/(loss)
Total comprehensive loss
for the year
Transactions with owners,
recorded directly in equity
Issue of ordinary shares
Share based payments
Loss of subsidiary sold
Share issue expenses
Balance at 31 March 2020
-
-
-
-
-
-
1,464,094
150,302
-
-
-
-
-
-
-
70,415
-
-
22
-
-
(66,418)
26,154,711
-
(2,413,892)
(2,413,892)
(199,356)
-
(199,356)
(199,356)
(2,413,892)
(2,613,248)
-
-
-
-
-
-
29,363
1,614,396
70,415
29,363
-
(66,418)
34,891,858
1,094,311
(89,917)
(60,205,023)
1,845,940
Notes forming part of these financial statements are included on pages 24 to 50.
TREK METALS LIMITED | ANNUAL REPORT 2021
22
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
YEAR ENDED
31 MARCH 2021
US$
YEAR ENDED
31 MARCH 2020
US$
NOTES
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration and evaluation
Interest received
Net cash used by operating activities
9
Cash flows from investing activities
Payments for exploration and evaluation
Payments for property, plant & equipment
Payments for exploration tenements
Cash flows from loan to other entities
Proceeds received on sale of subsidiaries
Acquisition of subsidiary, net of cash acquired
Net cash used by investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Payments for share issue costs
Net cash generated by financing activities
(454,271)
(22,341)
10,352
(466,260)
(271,240)
(3,174)
(42,439)
(22,259)
-
(155,961)
(495,073)
3,039,471
(134,344)
2,905,127
(465,037)
(44,311)
6,069
(503,279)
(176,106)
-
-
-
133,664
-
(42,442)
1,614,398
(66,419)
1,547,979
Net increase / (decrease) in cash and cash
equivalents
1,943,794
1,002,258
Cash and cash equivalents at beginning of the
year
Effects of exchange rate changes on the balance of
cash held in foreign currencies
Cash and cash equivalents at the end of year
1,336,325
462,200
9
311,485
3,591,604
(128,133)
1,336,325
Notes forming part of these financial statements are included on pages 24 to 50.
TREK METALS LIMITED | ANNUAL REPORT 2021
23
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
NOTE 1:
CORPORATE INFORMATION
Trek Metals Limited is a limited company incorporated in Bermuda, whose shares are publicly traded
on the Australian Securities Exchange.
The consolidated financial statements of the Company as at and for the year ended 31 March 2021
comprise the Company and its subsidiaries (together referred to as the “Group” and individually as
“Group entities”) and the Group’s interest in associates and jointly controlled entities.
The principal activities of the Company and its subsidiaries (“the Group”) is to progress the
exploration of its mineral properties and to identify suitable acquisitions in the mineral resources
sector.
(a)
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in
accordance with the Australian Accounting Standards and Interpretations.
The financial statements comprise the consolidated financial statements of the Group. For the
purposes of preparing the consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian
Accounting Standards ensures that the financial statements and notes of the company and the Group
comply with International Financial Reporting Standards (‘IFRS’).
(b) Going Concern
This financial report has been prepared on the going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and settlement of liabilities in the
normal course of business.
The Group incurred a loss for the year of US$196,588 (2020: loss of US$2,413,892) and cash outflows
from operating activities of US$466,260 (2020: US$503,279).
The directors have prepared a cash flow forecast, which indicates that the Company will have
sufficient cash flows to meet all commitments and working capital requirements for the 12 month
period from the date of signing this financial report.
Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that
the going concern basis of preparation is appropriate. In particular, given the Company’s history of
raising capital to date, the directors are confident of the Company’s ability to raise additional funds
as and when they are required.
NOTE 2: ADOPTION OF NEW AND REVISED STANDARDS
Accounting Standards that are mandatorily effective for the current reporting year
The Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for
an accounting period that begins on or after 1 January 2020. New and revised Standards and
amendments thereof and Interpretations effective for the current year that are relevant to the Group
include:
• AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
• AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
TREK METALS LIMITED | ANNUAL REPORT 2021
24
• AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual
Framework
• AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform
• AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New
IFRS Standards Not Yet Issued in Australia.
The Directors have determined that there is no material impact of the new and revised Standards
and Interpretations on the Group and, therefore, no material change is necessary to Group
accounting policies.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Group has not applied the new and
revised Australian Accounting Standards, Interpretations and amendments that have been issued
but are not yet effective. Based on a preliminary review of the standards and amendments, the
Directors do not anticipate a material change to the Group’s accounting policies, however further
analysis will be performed when the relevant standards are effective.
NOTE 3:
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
Basis of Preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for
certain financial instruments that are measured at fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is generally based on the fair values of the
consideration given in exchange for goods and services. All amounts are presented in US dollars,
unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date,
regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Group takes into account the
characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. Fair value for measurement
and/or disclosure purposes in these consolidated financial statements is determined on such a basis,
except for share-based payment transactions that are within the scope of AASB 2, leasing
transactions that are within the scope of AASB 16, and measurements that have some similarities to
fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2
or 3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as
follows:
•
•
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
(a)
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities (including structured entities) controlled by the Company and its subsidiaries. Control is
achieved when the Company:
•
•
•
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.
TREK METALS LIMITED | ANNUAL REPORT 2021
25
When the Company has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Company considers all relevant facts and circumstances in
assessing whether or not the Company's voting rights in an investee are sufficient to give it power,
including:
•
•
•
•
the size of the Company's holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be made,
including voting patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of
profit or loss and other comprehensive income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of
the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
(b) Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which
the estimate of future cash flows have not been adjusted. Any excess of the asset’s carrying value
over its recoverable amount is expensed to the income statement.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been recognised
for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised
immediately in the income statement.
Where a reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest group
of cash generating units for which a reasonable and consistent allocation basis can be identified.
(c) Foreign Currency Transactions and Balances
a.
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The functional currency and presentation
currency of the parent is USD. The consolidated financial statements are presented in US Dollars.
TREK METALS LIMITED | ANNUAL REPORT 2021
26
On 1 April 2021, Trek Metals Limited changed its reporting (presentation) currency from US dollars
to Australian dollars. This change in reporting currency better reflects the Company’s current and
future underlying activities. Accordingly, all future quarterly reports, half-year and annual reports
will be reflected in Australian dollars including where required relevant comparative information.
b.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-
end exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were determined.
Exchange differences arising on the transition of monetary items are recognised in the income
statement in the period in which they arise, except where deferred in equity as a qualifying cash
flow.
Exchange differences arising on the translation of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange
difference is recognised in the income statement.
c.
Group companies
The financial results and position of foreign operations whose functional currency is different from
the Group’s presentation currency are translated as follows:
•
•
•
Assets and liabilities are translated at period-end exchange rates prevailing at that reporting
date;
Income and expenses are translated at average exchange rates for the period; and
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the balance sheet. These differences are recognised in the
income statement in the period in which the operation is disposed.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are expressed in USD using exchange rates prevailing at the end of the
reporting period. Income and expense items are translated at the average exchange rates for the
period, unless exchange rates fluctuated significantly during that period, in which case the exchange
rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised
in other comprehensive income and accumulated in equity (attributed to non-controlling interests
as appropriate).
(d) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or loss over the period of the borrowings
using the effective interest method. Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate
for an equivalent non-convertible borrowing. This amount is recorded as a liability on an amortised
cost basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds
is allocated to the conversion option. This is recognised and included in shareholders’ equity, net of
income tax effects.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability
TREK METALS LIMITED | ANNUAL REPORT 2021
27
that has been extinguished or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or
finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to
a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised
in profit or loss, which is measured as the difference between the carrying amount of the financial
liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
NOTE 4:
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 3, the directors are
required to make judgments, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The following are the critical judgments and estimations that the directors have made in the process
of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.
a.
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a
number of factors, including whether the Group decides to exploit the related lease itself or, if not,
whether it successfully recovers the related exploration and evaluation asset through sale. Factors
which could impact the future recoverability include the level of proved, probable and inferred
mineral resources, future technological changes which could impact the cost of mining, future legal
changes and the approval of the Environmental Impact Study (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration evaluation expenditure is determined not to be
recoverable in the future, this will reduce profits and net assets in the period in which this
determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest
have not yet reached a stage which permits reasonable assessment of the existence or otherwise of
economically recoverable reserves. To the extent that it is determined in the future that this
capitalised expenditure should be written off, this will reduce profits and net assets in the period in
which this determination is made.
b.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by using a Black Scholes model.
c.
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based
on the best estimates of the directors. These estimates take into account both the financial
performance and position of the Group as they pertain to current income taxation legislation, and
the directors understanding thereof. No adjustment has been made for pending or future taxation
legislation. The current income tax position represents the directors’ best estimate, pending an
assessment by the applicable taxation authorities.
TREK METALS LIMITED | ANNUAL REPORT 2021
28
NOTE 5:
SEGMENT INFORMATION
(a)
Identification of reportable segments
The Group operates predominantly in the mining and exploration industry. This comprises
exploration and evaluation activities that relate to the Gold and Base metals projects in the Pilbara
of Western Australia and the Kroussou zinc-lead project in Gabon which is subject to an earn-in
agreement with Apollo Minerals Limited.
The Group has identified its operating segments based on the internal reports that are provided to
the Board of Directors (chief operating decision makers) to assess performance and determine the
allocation of resources. Management has identified the operating segments based on the principal
location of its projects, being Australia and Africa, and its ASX listing and management location in
Australia.
(b) Basis of accounting for purposes of reporting by operating segments:
(i) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors are determined in
accordance with accounting policies that are consistent to those adopted in the annual financial
statements of the Group.
(ii) Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised at the consideration
received/to be received net of transaction costs. If inter-segment loans receivable and payable
are generally on commercial terms.
(iii) Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that
receives majority economic value from that asset. In the majority of instances, segment assets
are clearly identifiable on the basis of their nature and physical location.
(iv) Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the
liability and the operations of the segment. Borrowings and tax liabilities are generally considered
to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other
payables and certain direct borrowings.
The following is an analysis of the Group’s results by reportable operating segment for the period:
SEGMENT LOSS
31 MAR 2021
US$
31 MAR 2020
US$
Continuing operations
Exploration and evaluation
Corporate
Consolidated segment loss for the year from all operations
(22,341)
(174,247)
(196,588)
(1,745,899)
(667,993)
(2,413,892)
TREK METALS LIMITED | ANNUAL REPORT 2021
29
The following is an analysis of the Group’s assets by reportable operating segment:
Continuing operations
Exploration and evaluation
Unallocated corporate assets
Consolidated segment assets
SEGMENT ASSETS
31 MAR 2021
US$
31 MAR 2020
US$
1,657,342
3,603,554
5,260,896
660,860
1,314,254
1,975,114
The following is an analysis of the Group’s liabilities by reportable operating segment:
Continuing operations
Exploration and evaluation
Unallocated corporate liabilities
Consolidated segment liabilities
NOTE 6: RECONCILIATION OF LOSS
SEGMENT LIABILITIES
31 MAR 2021
US$
31 MAR 2020
US$
157,830
56,337
214,167
104,326
24,848
129,174
Interest revenue is recognised when it is probable that the economic benefits will flow to the Group
and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset
to that asset’s net carrying amount on initial recognition.
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
TREK METALS LIMITED | ANNUAL REPORT 2021
30
The loss before tax from continuing operations after charging expenses and receiving income was as
follows:
Investment Revenue
Interest revenue
Total Investment Revenue
Other Income
ATO refund related to prior periods
Total Other Income
Other Operating Expenses
Auditor’s remuneration
Communications costs
Consultants
Contract accounting and company secretarial
Directors’ fees and consultant fees
Insurance
Lease costs
Legal
Corporate & statutory costs
Travel
Software expenses
Business development
Other costs
Total Other Operating Expenses
NOTE 7:
EARNINGS PER SHARE
31 MAR 2021
US$
31 MAR 2020
US$
10,352
10,352
-
-
(26,384)
(5,123)
(24,759)
(70,746)
(183,983)
(10,978)
(6,669)
(42,126)
(55,466)
(3,717)
(2,006)
(18,972)
(7,654)
(458,583)
6,069
6,069
391
391
(20,176)
(4,839)
(52,731)
(68,600)
(144,679)
(11,238)
(7,766)
(873)
(51,887)
(25,171)
(5,457)
(24,513)
(6,074)
(424,004)
The calculation of the basic and diluted (loss) /earnings per share is based on the following information:
Earnings
Loss attributable to the ordinary equity holders of the
Company used in calculating basic and diluted loss per
share:
From continuing operations
Shares
Weighted average number of ordinary shares used as
the denominator in calculating basic loss per share
Adjustment for calculation of diluted earnings per share:
Options
Weighted average number of ordinary shares and
potential ordinary shares used as the denominator in
calculating diluted loss per share
31 MAR 2021
US$
31 MAR 2020
US$
(196,588)
(196,588)
(2,413,892)
(2,413,892)
214,584,644
140,975,854
-
-
214,584,644
140,975,854
Basic Loss per Share
Total basic loss per share attributable to the ordinary
equity holders of the Company
Cents/share
Cents/share
(0.09)
(1.71)
Total diluted loss per share attributable to the ordinary
equity holders of the Company
(0.09)
(1.71)
TREK METALS LIMITED | ANNUAL REPORT 2021
31
The following number of potential ordinary shares are not dilutive and are therefore excluded from
the weighted average number of ordinary shares in the year ended 31 March 2021:
Unlisted Options
Performance Rights
NOTE 8:
INCOME TAX
31 MAR 2021
32,700,539
15,825,000
48,525,539
31 MAR 2020
28,456,789
-
28,456,789
The charge for current income tax expenses is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are
substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting taxable
profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the income statement except where it relates
to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will
be available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that
the Group will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
Major components of income tax for the year ended 31 March 2021 are as follows:
Current income tax charge
31 MAR 2021
US$
-
31 MAR 2020
US$
-
Income tax expense reported in income statement
-
-
The current tax liabilities are as follows:
Income tax payable
31 MAR 2021
US$
-
-
31 MAR 2020
US$
-
-
TREK METALS LIMITED | ANNUAL REPORT 2021
32
A reconciliation of the income tax expense applicable to the loss from operating activities before
income tax at the statutory income tax rate to income tax expense at the Group’s effective income
tax rates is as follows:
Loss from operating activities before income tax
31 MAR 2021
US$
(196,588)
31 MAR 2020
US$
(2,413,892)
Prima facie tax benefit on loss from ordinary activities at 30%
(2020: 27.5%)
(58,976)
(663,820)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income
- Non-deductible expenses
-
International tax rate differential
11,435
348
(47,193)
19,635
-
(644,185)
Movement in temporary differences
(270,716)
(7,977,562)
Tax effect of current year losses not recognised:
At Gabonese statutory income tax rate of 35% (2020: 35%)
At Australian statutory income tax rate of 30% (2020: 27.5%)
Income tax expensed reported in income statement
-
317,909
-
954
8,620,793
-
Unrecognised deferred tax balances relate to the following:
Deferred tax assets at 27.5% (2020: 27.5%)
Provisions
Prepayments
Capitalised Expenses
Capitalised Exploration costs
Accrued expenses
Property, plant &equipment
Exploration & evaluation expenditure
Un-realised foreign exchange gains
Capital Raising costs
Total Deferred Tax Assets
31 MAR 2021
US$
31 MAR 2020
US$
139,046
(1,786)
3,626
98,867
6,687
(16,070)
(129,972)
(93,446)
114,559
121,511
127,459
(2,833)
3,324
98,867
4,410
-
-
-
59,154
290,381
Potential deferred tax assets for the Group are attributable to Gabonese and Australian tax losses
carried forward by the subsidiaries and future benefits to exploration expenditure and other
temporary differences allowable for deduction. Deferred tax assets have not been brought to
account in the consolidated statements as at 31 March 2021 because the directors are of the opinion
that it is not appropriate to regard full realisation of the deferred tax assets as probable.
These benefits will only be obtained if:
a) The subsidiaries derive future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions to be realised; and
b) The subsidiaries continue to comply with the conditions for deductibility imposed by tax
legislation; and
c) No changes in tax legislation adversely affect the subsidiaries in realising the benefit from the
deduction of the losses.
TREK METALS LIMITED | ANNUAL REPORT 2021
33
Unused tax losses not brought to account are as follows:
Opening unused tax losses
Add: losses for the year
Less: Prior year adjustment
Unused tax losses
31 MAR 2021
US$
42,489,064
1,060,850
(1,382,272)
42,167,642
31 MAR 2020
US$
11,137,545
31,351,519
-
42,489,064
NOTE 9:
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term
highly liquid investments with original maturities of three months or less, and bank overdrafts.
Bank balances
Term deposit (1)
31 MAR 2021 31 MAR 2020
US$
1,323,473
12,852
1,336,325
US$
3,575,267
16,337
3,591,604
(1) A$20,000 of the cash and cash equivalents is restricted and set aside to offset credit card limits.
(a)
Reconciliation of profit or loss after income tax to net cash flow from operating activities
Loss for the year
Share-based payment expense
Exploration asset expensed
Sale of subsidiaries
Net exchange differences
Change in operating assets and liabilities, net of effects
from sale of subsidiary:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in other assets – current & non-
current
(Decrease)/increase in trade and other payables
Net cash outflow from operating activities
(b) Non-cash investing and financing activities
31 MAR 2021
US$
31 MAR 2020
US$
(196,588)
37,501
-
-
(311,485)
(2,413,892)
70,415
2,035,696
(304,911)
128,133
(25,843)
8,515
(56)
30,211
(466,260)
5,406
(32,641)
(503,279)
31 MAR 2021
US$
31 MAR 2020
US$
Acquisition of ACME Pilbara Pty Ltd via the issue of shares
(refer Note 11)
Acquisition of Tenement E45/5484 via issue of shares
238,745
38,616
-
-
TREK METALS LIMITED | ANNUAL REPORT 2021
34
NOTE 10: TRADE AND OTHER RECEIVABLES
Current
Other receivables
31 MAR 2021
US$
31 MAR 2020
US$
40,966
40,966
10,775
10,775
Trade and other receivables are non-interest bearing, have no security held against them and are,
on average, on terms of 15 days.
NOTE 11: EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure primarily consist of activities including drilling, assaying,
geochemical and geophysical investigations and independent geological consultants in respect of
each identifiable area of interest. These costs are capitalised provided the rights to tenure of the
area of interest is current and either:
a)
the expenditures are expected to be recouped through successful development and exploitation
or sale of the area of interest; or
b) activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in or relating to, the area of interest are continuing.
When the technical feasibility and commercial viability of extracting a mineral resource have been
demonstrated then any capitalised exploration and evaluation expenditure is reclassified as
capitalised mine development. Prior to reclassification, capitalised exploration and evaluation
expenditure is measured at cost and assessed for impairment.
(a)
Impairment
All capitalised exploration and evaluation expenditure is monitored for indications of impairment on
a cash-generating unit basis. The cash generating unit shall not be larger than the area of interest. If
sufficient data exists to determine technical feasibility and commercial viability, and facts and
circumstances suggest that the carrying amount exceeds the recoverable amount, the capitalised
expenditure which is not expected to be recovered is charged to the income statement.
31 MAR 2021 31 MAR 2020
US$
US$
Exploration and Evaluation Expenditure
1,560,805
610,200
Movement during the period:
Opening balance
Acquisition of ACME Pilbara Pty Ltd
Additions for the period
Foreign exchange movement
Impairment of expenditure
Closing balance at balance date
610,200
381,920
417,195
151,490
-
1,560,805
2,467,212
-
166,732
11,952
(2,035,696)
610,200
The Group’s exploration properties may be subject to claim under Native Title (or jurisdiction
equivalent), or contain sacred sites, or sites of significance to the indigenous people of Australia,
Zambia and Gabon. As a result, exploration properties or areas within the tenements may be subject
to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not
possible to quantify whether such claims exist, or the quantum of such claims.
The Company policy is to charge exploration expenditure to specific areas of interest. Exploration
expenditure that cannot be attributed to specific areas of interest is written off.
TREK METALS LIMITED | ANNUAL REPORT 2021
35
Recoverability of the Group’s carrying value of interests in mineral projects is subject to the
successful development and exploitation of the exploration properties or alternatively, the sale of
these tenements at amounts at least equal to the book values.
Kroussou (Gabon) exploration expenditure
The Group had previously capitalised exploration and evaluation expenditures for the Kroussou
Project. Following the recent Earn-in agreement with Apollo Minerals Limited and completion of all
conditions precedent the Directors have decided to impair the carrying value of the Kroussou project
to A$1,000,000 (US$761,690) based on an estimate of the remaining value of the Earn-in agreement
and carrying interest in the project.
Acquisition of ACME Pilbara Pty Ltd
On 14 August 2020, Trek acquired ACME Pilbara Pty Ltd (ACME). The acquisition of ACME was
deemed an asset acquisition.
Purchase consideration
- Cash
-
Issue of fully paid ordinary shares (6,666,667 @
$0.03AUD)
Less:
- Cash on hand
Net Liabilities acquired
Exploration assets at cost
NOTE 12: SUBSIDIARIES
Fair value
US$
143,247
238,745
381,992
72
72
381,920
The consolidated financial statements include the financial statements of Trek Metals Limited and
the subsidiaries listed below:
COUNTRY OF
INCORP’N
CLASS OF
SHARE
CAPITAL
HELD
HOLDING & VOTING CAPACITY (%)
31 MAR 2021
31 MAR 2020
TM Resources Pty Ltd
Australia
Ordinary
Trek Management Pty Ltd
Australia
Ordinary
Elm Resources Pty Ltd
Australia
Ordinary
Select Exploration
Mauritius
Ordinary
Select Exploration (Gabon) *
Gabon
Ordinary
ACME Pilbara Pty Ltd
Australia
Ordinary
100
100
100
100
100
100
100
100
100
100
100
0
* On 4 September 2019 the Company entered into an Earn-in Agreement (EIA) with Apollo Minerals Limited
(Apollo Minerals, ASX: AON) for Apollo Minerals to earn-in an interest of up to 80% in the Kroussou zinc-lead
project (Kroussou Project or Project) in western Gabon.
TREK METALS LIMITED | ANNUAL REPORT 2021
36
NOTE 13:
INVESTMENTS IN ASSOCIATES
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control
or joint control over those policies. Trek Metals Limited holds 49% of the share capital of Cape
Resources Limited company controlled by Glencore International AG (Glencore). There were no
contributions by Trek Metals in 2021. The investment in this associate is carried at $Nil (2020: nil).
NOTE 14: TRADE AND OTHER PAYABLES
Current
Trade and other payables
Accrued expenses
31 MAR 2021 31 MAR 2020
US$
US$
151,151
60,459
211,610
54,319
16,036
70,355
Trade payables and accruals are non-interest bearing and have repayment terms within 30 days.
NOTE 15: PROVISIONS
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result, and that outflow can
be reliably measured. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the balance sheet date, taking into account the risks and
uncertainties surrounding the obligation. Where a provision is measured using the cash flow
estimated to settle the present obligation, its carrying amount is the present value of those cash
flows.
Current
*Provision - CNSS
Other provisions
31 MAR 2021 31 MAR 2020
US$
US$
-
2,557
2,557
58,819
-
58,819
*During the period, the Company’s subsidiary Select Exploration (Gabon) agreed terms to settle the
Gabon National Social security claim for the amount of XAF 28,816,370. The amount remaining to be
paid at 31 March 2021 is XAF 17,336,158 (US$31,240) and shown in current liabilities.
NOTE 16:
ISSUED CAPITAL
Authorised ordinary shares of par £0.01 each, carrying one vote per share and rights to dividends.
The ordinary shares on issue is summarised as follows:
31 MARCH 2021
Issued and fully paid ordinary shares
As at 1 April 2020
Allotments
23/07/2020 Placement at A$0.035 per share – Tranche 1 (1)
13/08/2020 Acquisition shares at A$0.05 per share (2)
31/08/2020 Placement at A$0.035 per share – Tranche 2 (1)
18/01/2021 Acquisition shares at A$0.067 per share
3/02/2021 Placement at A$0.06 per share (2)
18/02/2021 Exercise of options at A$0.056 per share
5/03/2021 Placement at A$0.06 per share (2)
Share Issue costs
Balances as at 31 March 2021
(1) Shares issued pursuant to capital raising of A$1.0M
(2) Shares issued pursuant to capital raising of A$3.0M
NUMBER
OF SHARES
ISSUED
CAPITAL
US$
SHARE
PREMIUM
US$
174,782,262
26,154,711
34,891,858
19,550,672
6,666,667
9,020,757
750,000
45,000,000
100,000
5,833,333
-
261,703,691
249,152
87,209
120,660
10,185
614,473
1,395
80,487
(214,529)
27,103,743
238,386
151,536
112,594
28,431
1,443,610
3,482
187,632
-
37,057,529
TREK METALS LIMITED | ANNUAL REPORT 2021
37
31 MARCH 2020
Issued and fully paid ordinary shares
As at 1 April 2019
No of shares Post-Consolidation 1:8 (3 October 2019)
Allotments
9/10/2019 Placement at A$0.02 per share (1)
Share Issue costs
Balances as at 31 March 2020
(1) Shares issued pursuant to capital raising of A$2.4M
Performance Rights
NUMBER
OF SHARES
ISSUED
CAPITAL
US$
SHARE
PREMIUM
US$
438,254,890
54,782,262
24,757,035
24,757,035
34,741,556
34,741,556
120,000,000
-
174,782,262
1,464,094
(66,418)
26,154,711
150,302
-
34,891,858
At 31 March 2021, the number of Performance Rights of the Company on issue are:
Performance Rights Issued
Class A
Class B
Class C
Class D
Class E
Class F
Options on Issue
No of rights
4,375,000
4,375,000
4,375,000
900,000
900,000
900,000
15,825,000
Fair value at
Grant Date
(US$)
0.0377
0.0346
0.0322
0.0508
0.0508
0.0508
Grant
date
05/03/21
05/03/21
05/03/21
05/03/21
05/03/21
05/03/21
Expiry
05/03/25
05/03/25
05/03/25
05/03/25
05/03/25
05/03/25
Vested
#
-
-
-
-
-
-
-
Unissued ordinary shares of the Company under option at 31 March 2021 are as follows (post-
consolidation of shares and options):
Options issued
Options issued to Investors:
Free attaching options to investors
Free attaching options to Acquiree
Options issued as Share Based
Payments:
Directors
Consultant
Directors
Consultant
Consultant
Consultant
Consultant
Directors
Directors
Consultant
Broker Options
Employee
Directors
Broker Options
Directors
Directors
Consultant
Broker Options
Consultant
Director
Broker Options
Options outstanding and
exercisable as at 31 March 2021
No of
options
4,233,874
660,415
4,894,289
1,750,000
93,750
625,000
125,000
375,000
125,000
187,500
375,000
2,250,000
125,000
500,000
375,000
2,125,000
3,125,000
1,875,000
3,750,000
3,025,000
2,500,000
1,500,000
2,000,000
1,000,000
27,806,250
32,700,539
Exercise
price
(US$)
Fair value
at Grant
Date (US$)
Grant
date
Expiry
Vested
#
0.38
0.61
-
-
04/12/17
27/4/18
02/11/21
27/04/21
0.34
0.35
0.36
0.36
0.37
0.38
0.38
0.38
0.38
0.38
0.38
0.13
0.13
0.13
0.04
0.04
0.04
0.04
0.04
0.08
0.08
0.15
0.16
0.13
0.13
0.26
0.11
0.12
0.10
0.10
0.12
0.12
0.03
0.03
0.03
0.011
0.005
0.005
0.005
0.014
0.028
0.028
18/01/17
18/01/17
23/02/17
23/02/17
23/02/17
30/08/17
24/10/17
04/12/17
04/12/17
04/12/17
04/12/17
17/09/18
08/10/18
08/10/18
02/09/19
03/10/19
03/10/19
03/10/19
01/07/20
05/03/21
05/03/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
02/11/21
08/10/21
08/10/21
08/10/21
30/09/23
30/09/23
30/09/23
30/09/23
30/06/24
05/03/23
05/03/23
4,233,874
660,415
4,894,289
1,750,000
93,750
625,000
125,000
375,000
125,000
187,500
375,000
2,250,000
125,000
500,000
375,000
2,125,000
3,125,000
1,875,000
3,750,000
3,125,000
2,500,000
-
2,000,000
1,000,000
26,306,250
31,200,539
TREK METALS LIMITED | ANNUAL REPORT 2021
38
NOTE 17: RESERVES
(a)
Share Premium Reserve
The share premium reserve records the amounts paid by shareholders for shares in excess of their
nominal value. See note 16 for further information.
(b)
Share-Based Payment Reserve
The share-based payment reserve records the fair value of options and performance rights granted
to staff and directors, and suppliers.
Movement in unlisted options
Number
US$
Balance at 1 April 2020
Issue of options exercisable at US$0.04 each expiring
30/06/2024
Issue of options exercisable at US$0.08 each expiring 5/03/2023
Options lapsed
Options exercised
Balance at 31 March 2021
23,562,500
1,500,000
1,094,311
6,484
3,000,000
(156,250)
(100,000)
27,806,250
82,734
-
(536)
1,182,993
Movement in performance rights
Number
US$
Balance at 1 April 2020
Issue of Classes A – F (granted 5 March 2021)
Balance at 31 March 2021
-
15,825,000
15,825,000
-
31,017
31,017
(c)
Translation Reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations
from their functional currencies to the Group’s presentation currency of USD are recognised directly
in other comprehensive income and accumulated in the foreign currency translation reserve. Gains
and losses on hedging instruments that are designated as hedges of net investments in foreign
operations are included in the foreign currency translation reserve. Exchange differences previously
accumulated in the foreign currency translation reserve (in respect of translating both the net assets
of foreign operations and hedges of foreign operations) are reclassified to profit or loss on the
disposal or partial disposal of the foreign operation.
Movement in foreign currency translation
Opening balance
Translation of foreign currency financial statements into
the functional currency
Exchange differences realised on disposal of foreign
operations
Closing balance
31 MAR 2021
US$
(89,917)
162,975
31 MAR 2020
US$
109,439
(26,957)
-
(172,399)
73,058
(89,917)
TREK METALS LIMITED | ANNUAL REPORT 2021
39
NOTE 18: FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in profit or loss.
(a)
Financial Assets
On initial recognition, financial assets are classified as measured at:
•
•
•
•
Amortized cost;
Fair Value through Other Comprehensive Income (“FVOCI”) – debt investment;
FVOCI – equity investment; or
Fair Value through Profit or Loss (“FVTPL”)
The classification of financial assets is generally based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. A financial asset (unless it is a trade
receivable without a significant financing component that is initially measured at the transaction
price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are
directly attributable to its acquisition. For financial assets measured at amortized cost, these assets
are subsequently measured at amortized cost using the effective interest method. The amortized
cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss.
Any gain or loss on derecognition is recognized in profit or loss.
As of 31 March 2021, the Group’s financial instruments consist of cash and cash equivalents, trade
and other receivables and trade and other payables.
Cash and cash equivalents and other receivables are classified as amortised cost under AASB 9. The
trade and other payables are designated as other financial liabilities, which are measured at
amortised cost.
The cash and cash equivalents, trade and other receivables, and trade and other payables
approximate their fair value due to their short-term nature.
The Group classified the fair value of the financial instruments according to the following fair value
hierarchy based on the amount of observable inputs used to value the instruments:
The three levels of the fair value hierarchy are:
•
•
•
Level 1 – Values based on unadjusted quoted prices available in active markets for identical
assets or liabilities as of the reporting date.
Level 2 – Values based on inputs, including quoted prices, time value and volatility factors, which
can be substantially observed or corroborated in the marketplace. Prices in Level 2 are either
directly or indirectly observable as of the reporting date.
Level 3 – Values based on prices or valuation techniques that are not based on observable
market data.
Impairment of financial assets
The Group assesses the recoverability of financial assets using an ‘expected credit loss’ (“ECL”)
model. This impairment model is applied to financial assets measured at amortized cost, contract
assets and debt investments at Fair Value Through Other Comprehensive Income (“FVOCI”), but not
to investments in equity instruments.
TREK METALS LIMITED | ANNUAL REPORT 2021
40
In accordance with AASB 9, loss allowances are measured on either of the following bases:
•
•
12-month ECLs: these are ECLs that result from possible default events within the 12 months
after the reporting date; and
Lifetime ECL: these are ECLs that result from all possible default events over the expected life of
a financial instrument.
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present
value of all cash shortfalls (I.e. the difference between the cash flows due to the Group in accordance
with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the
effective interest rate of the financial asset.
Categories of financial instruments
Financial assets
Cash and bank balances
Trade and other receivables
Financial liabilities
Trade and other payables
31 MAR 2021
US$
31 MAR 2020
US$
3,591,604
40,996
1,336,325
10,775
180,370
70,355
Financial Risk Management objectives and policies
The Group’s risk oversight and management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects and ensure that net cash flows are sufficient
to support the delivery of the Group’s financial targets whilst protecting future financial security. The
Group continually monitors and tests its forecast financial position against these objectives and may
undertake forward-rate agreements when necessary to ensure the objectives are achieved.
The Group’s activities expose it to a variety of financial risks; market, credit and liquidity. These risks
are managed by senior management in line with policies set by the Board. The Group’s principal
financial instruments comprise cash and short-term deposits. Other financial instruments include
trade receivables and trade payables, which arise directly from operations.
It is, and has been throughout the period under audit, Group policy that no speculative trading in
financial instruments be undertaken.
Market risk
(a)
Interest Rate Risk
The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates. The Group manages this risk by maintaining
an appropriate mix between fixed and floating rate instruments.
The effective weighted average interest rates on classes of financial assets and financial liabilities are
as follows:
31 March 2021
Weighted
Ave
Effective
Int Rate
%
Less than
1 month
US$
1 month
– 1 year
US$
1 – 5
years
US$
5+ years
US$
Total
US$
Financial Assets
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
Total Financial Assets
-
0.3
0.51
0.50
40,966
16,337
3,575,267
3,632,570
Financial Liabilities
Non-interest bearing
Total Financial Liabilities
-
-
180,370
180,370
-
-
-
-
-
-
-
-
-
-
-
-
40,966
-
-
16,337
- 3,575,267
- 3,632,570
-
-
180,370
180,370
TREK METALS LIMITED | ANNUAL REPORT 2021
41
Financial assets are classified based upon their expected maturity whilst financial liabilities are
classified based upon their contractual maturity.
31 March 2020
Financial Assets
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
Total Financial Assets
Financial Liabilities
Non-interest bearing
Total Financial Liabilities
(b) Currency risk
Weighted
Ave
Effective
Int Rate
%
Less than
1 month
US$
1 month
– 1 year
US$
1 – 5
years
US$
5+ years
US$
Total
US$
-
1.1
0.6
0.58
-
-
10,775
12,852
1,323,473
1,347,100
70,355
70,355
-
-
-
-
-
-
-
-
-
-
-
-
10,775
-
-
12,852
- 1,323,473
- 1,347,100
-
-
70,355
70,355
The Group has subsidiaries operating in Africa and Australia, whose businesses are conducted
predominantly in Central African Franc, Euro, Australian Dollars, and US dollars respectively,
exposing the Group to exchange rate fluctuations.
The Group manages this risk by monitoring foreign exchange rates, maintaining the majority of cash
assets in Australia Dollars, and limiting the amounts transferred to the subsidiaries to that which is
required to sustain operations. The Company’s funding and previous borrowings are in Australian
Dollars and are also subject to foreign exchange fluctuations through retranslation to the
presentation currency of USD. The Group has not entered into any derivative financial instruments
to hedge such transactions.
Foreign exchange differences on retranslation of the foreign subsidiaries’ assets and liabilities are
taken to the translation reserve.
At year end the Group has US$3,587,514 (2020: US$1,302,331) of monetary assets held in Australian
Dollars, US$Nil (2020: US$Nil) in Euros, US$4,090 (2020: US$33,994) in Central African Franc. The
maximum exposure to credit risk is represented by the carrying amount of each of these assets in
the balance sheet.
The following table summarises the sensitivity of financial instruments held at the balance sheet date
to movements in the exchange rate of the Central African Franc, Euro and Australian Dollar to the
US Dollar, with all other variables held constant. The sensitivities are based on an analysis of actual
historical rates for the preceding five-year period.
IMPACT ON PROFIT
IMPACT ON EQUITY
AUD/USD +10%
AUD/USD -10%
XAF/USD +10%
XAF/USD -10%
31 MAR 2021 31 MAR 2020 31 MAR 2021
US$
(358,740)
358,740
(454)
454
US$
130,221
(130,221)
3,777
(3,777)
US$
358,740
(358,740)
454
(454)
31 MAR 2020
US$
(130,221)
130,221
(3,777)
3,777
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
Group’s result for the year ended 31 March 2021 would increase/decrease by US$18,261 (2020:
increase/decrease by US$7,878). This is mainly attributable to the Group’s exposure to interest rates
on its variable rate investments.
TREK METALS LIMITED | ANNUAL REPORT 2021
42
(c)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. Due to the current nature of the Group’s operations there is no significant
concentration of credit risk. The credit risk on liquid funds is limited because the counterparties are
banks with high credit ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances
for losses, represents the Group’s maximum exposure to credit risk without taking account of the
value of any collateral or other security obtained.
(d)
Capital Risk Management
The Group manages capital to ensure that companies in the Group will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of the debt to equity
balance. The Group’s focus has been to raise sufficient funds through equity to fund exploration
activity. Management also aims to maintain a capital structure that ensures the lowest cost of capital
available to the entity. The Group monitors capital on the basis of the gearing ratio and the external
borrowings currently in place however this is not required since the facility was extinguished in the
prior period.
(e)
Liquidity risk
Liquidity risk refers to the risk that the Group will have insufficient funds to meet its operational
requirements. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that
adequate liquidity levels are maintained. The undiscounted contractual or expected maturities of the
financial assets and liabilities are reported in the tables under “Interest rate risk”.
(f)
Fair Values
Monetary financial assets and liabilities not readily traded in an organised financial market have been
valued at cost, which approximates fair value.
The carrying amount of cash and cash equivalents approximate net fair value.
The carrying amounts and net fair values of financial assets and liabilities as at the reporting date are
as follows:
Financial Assets
Trade and other receivables
Financial Liabilities
Trade and other payables
FAIR VALUE
HIERARCHY
31 MAR 2021
US$
31 MAR 2020
US$
Level 2
40,966
10,775
Level 2
180,370
70,355
TREK METALS LIMITED | ANNUAL REPORT 2021
43
NOTE 19: COMMITMENTS
a. The Group has committed to the following minimum expenditure in relation to the Kroussou
project.
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
31 MAR 2021
US$
31 MAR 2020
US$
1,189,139
-
-
1,189,139
1,753,729
-
-
1,753,729
The Kroussou License which was renewed on 18 July 2018 requires a total of 1,793,706,000 CFA to
be spent over the 3 years from the date of renewal. The amount shown above is the remaining
expenditure commitment at year end. On 4 September 2019, the Company entered into an Earn-in
Agreement (EIA) with Apollo Minerals Limited for Apollo Minerals to earn-in an interest of up to 80%
in the Kroussou zinc-lead project. The Conditions Precedent to the EIA were satisfied on 11 May 2020
and Trek will not incur any further expenditure in relation to the Kroussou Project until Apollo
Minerals completes its earn-in obligations when a separate decision will be made by Trek as to
whether it participates to maintain a 20% interest, dilutes its interest or converts its interest into a
1% net smelter royalty. Accordingly, the above capital commitments are continued to be shown in
the accounts of Trek Metals Limited but will be offset by amounts spent by Apollo on the Kroussou
Project. Apollo have confirmed that a renewal request for the Kroussou license has been filed by
Select Exploration Gabon.
b. The Group has committed to the following minimum expenditure in relation to the ACME
Pilbara tenements.
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
NOTE 20: CONTINGENCIES
a.
TM Resources Acquisition
31 MAR 2021
US$
31 MAR 2020
US$
67,029
174,066
-
241,095
-
-
-
-
On 16 September 2016, the Company, and the shareholders of TM Resources Pty Ltd (TM) entered
into a Share Sale Agreement which resulted in the Company acquiring all the shares on issue in TM.
The Company paid US$7,516 (A$10,000) on execution of the Share Sale Agreement.
The Company also agreed to pay the following contingent consideration:
1. Trek Metals Limited (TML) shares to the value of A$50,000 within 7 days of the grant of the
tenements that TM has applied for.
2. A$1,000,000 upon the public release by TML of Mineral Resource Estimate in respect of the Lawn
Hill Project of between 550Kt Zn eq - 1.1Mt Zn eq; and
3. A$3,000,000 upon the public release by TML of a Mineral Resource Estimate in respect of the
Lawn Hill Project of greater than 1.1Mt Zn eq.
TREK METALS LIMITED | ANNUAL REPORT 2021
44
b.
Kroussou Earn-in Agreement and Deferred Consideration
Battery Minerals Arrangements
On 4 September 2019 the Company entered into an Earn-in Agreement (EIA) with Apollo Minerals
Limited (Apollo Minerals, ASX: AON) for Apollo Minerals to earn-in an interest of up to 80% in the
Kroussou zinc-lead project (Kroussou Project or Project) in western Gabon. Trek, through a wholly
own subsidiary, entered into a Sale Agreement and Royalty Deed with Battery Minerals Limited on
27 April 2018 in which Trek acquired 100% of the Kroussou Project from Trek JV partner, Battery
Minerals Limited (ASX:BAT) (Battery Minerals Arrangements).
On 11th May 2020, Apollo Minerals confirmed that all conditions precedent for the EIA had been
satisfied. With the EIA becoming effective, Trek and Battery Minerals have mutually agreed to
terminate the Royalty Deed and certain terms of the Sale Agreement entered into on 27 April 2018.
The effect of this is that Trek’s royalty obligations (2.5% net smelter return royalty), Trek’s obligation
to pay the Deferred Consideration (payable upon a JORC-compliant Indicated Mineral Resource
Estimate), and other rights and obligations have been terminated and replaced with the following
future payments to Battery in certain circumstances:
• US$500,000 payable upon a Decision to Mine being made by the Earn-In Parties (payable by
Apollo Minerals); and
10% of the Net Project Profits received by Trek each year up to a maximum of US$2,500,000.
•
In the event that Trek’s interest in the Kroussou Project is converted to a royalty, Trek agrees to pay
Battery 50% of the royalty received per annum up to a total of US$3,750,000; and
In the event that Trek disposes its interest in the Kroussou Project, Trek agrees to pay Battery 10%
of the net sale proceeds.
NOTE 21: RELATED PARTIES
(a)
Subsidiaries
The subsidiaries and associates of the Group are identified in Note 12. Transactions between the
Company and its subsidiaries, which are related parties of the Company, have been eliminated on
consolidation and are not disclosed in this note. Details of transactions between the Group and other
related parties are disclosed below.
(b) Directors
The Directors of the Company during the year, and up to the date of this report, were as follows:
Tony Leibowitz (appointed 4 September 2020)
•
• Neil Biddle (appointed 4 September 2020)
•
• Gregory Bittar (resigned 4 September 2020)
• Michael Bowen (resigned 4 September 2020)
John Young
(c)
Related party transactions (other than director fees)
Mr Tony Leibowitz, Mr Neil Biddle and Mr John Young are all directors of Bardoc Gold Limited which
provided office premises and administration to the Company during the year totalling US$6,669
(2020: $Nil). Of this amount, US$1,219 (2020: $Nil) was included in payables and accruals at the end
of the reporting period.
Mr John Young provided normal Executive Director consulting services to the Company during the
year totalling US$91,707 (2020: US$19,923). Of this amount, US$11,462 (2020: $Nil) was included in
payables and accruals at the end of the reporting period.
Mr Michael Bowen is a partner of DLA Piper which provided legal services to the Company during
the year totalling US$1,542 (2020: US$6,640). Of this amount, $Nil (2020: $Nil) was included in
payables and accruals at the end of the reporting period.
TREK METALS LIMITED | ANNUAL REPORT 2021
45
(d)
Compensation of Key Management Personnel
The remuneration of directors and other members of key management during the year was as
follows:
Short term benefits
Share based payments
31 MAR 2021
US$
256,755
77,063
333,818
31 MAR 2020
US$
144,679
40,262
184,941
The remuneration of directors and key management is determined by the board having regard to
the performance of individuals and market trends.
At the end of the reporting period the following amounts were payable to KMPs:
• US$11,462 (2020: $Nil) was payable to Mr Young;
•
•
$Nil (2020: US$3,814) was payable to Mr Bittar; and
$Nil (2020: US$3,051) was payable to Mr Bowen.
There were no other balances outstanding from/to related parties.
NOTE 22: SHARE BASED PAYMENTS
Equity-settled share-based payments to directors, employees and others providing similar services
are measured at the fair value of the equity instrument at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest. At the end of each reporting period, the Group revises its estimate of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to
the Share Based Payments Reserve.
(a) Options issued
The Trek Metals Ltd Employee Incentive Performance Rights and Options Plan (“Plan”) was approved
at the General Meeting of shareholders on 4 March 2021. During the year ended 31 March 2021, the
following options were granted under the plan:
YEAR ENDED 31 MARCH 2021
No of
options
Exercise
price (US$)
Grant
date
Expiry
Vested
#
FV @ grant
date (US$/
unit)
Consultants
1,500,000
0.039 01/07/20 30/06/24
-
0.014
Total plan options
1,500,000
The following options were granted following shareholder approval at the General Meeting on 4
March 2021:
YEAR ENDED 31 MARCH 2021
No of
options
Exercise
price (US$)
Grant
date
Expiry
Vested
#
FV @ grant
date (US$/
unit)
Broker Options
Consideration Options
1,000,000
2,000,000
0.077 05/03/21 05/03/23
0.077 05/03/21 05/03/23
1,000,000
2,000,000
0.028
0.028
Total other options
3,000,000
TREK METALS LIMITED | ANNUAL REPORT 2021
46
There has been no alterations of terms or conditions of the above share-based payments. Options
granted carry no dividend or voting rights. When exercisable, each option is convertible into one
ordinary share of the Company with full dividend and voting rights.
31 MAR 2021
31 MAR 2020
Weighted
average
exercise price
(US$)
0.16
-
0.064
(0.117)
-
(0.038)
0.14
No of options
23,562,500
-
4,500,000
(156,250)
-
(100,000)
27,806,250
27,806,250
No of options
103,500,000
(90,562,500)
11,250,000
(625,000)
-
-
23,562,500
23,562,500
Weighted
average
exercise price
(US$)
0.031
-
0.042
(0.023)
-
-
0.16
Options at beginning of year
Consolidation adjustment 1:8 (3 Oct 2019)
Options granted
Options lapsed
Options forfeited/cancelled
Options exercised
Options at end of year
Options exercisable at end of year
Share options pricing model
The fair value of the equity-settled share options granted during the year is estimated as at the date
of grant using a Black Scholes Option Pricing model. The following table lists the inputs to the models
used for the valuation of options issued during the year ended 31 March 2021:
Number of Options
Fair values at measurement date –
US$/share
Grant date share price – US$/share
Exercise price – US$/share
Expected volatility %
Options life in years
Dividend yield
Risk-free interest rate %
Consideration
Options
Plan
Options
Broker
Options
2,000,000
0.028
0.048
0.077
133.8
2
-
0.10
1,500,000
0.014
0.024
0.039
92.1
4
-
0.26
1,000,000
0.028
0.048
0.077
133.8
2
-
0.10
The weighted average fair value of options granted during the period is US$0.023 (2020: US$0.05).
The expected life of the share options is based on historical data and is not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects the assumption that the historical
volatility over a period similar to the life of the options is indicative of future trends, which may not
necessarily be the actual outcome.
TREK METALS LIMITED | ANNUAL REPORT 2021
47
(b)
Performance Rights issued
The Company has the following Performance Rights issued to Directors, employees and consultants
in existence during the current reporting period. There were no rights prior to the current reporting
period.
Class
Grant date
Expiry Date
Performance Rights 2021
Opening
Balance 1
April 2020
Granted
during the
year
Vested during
the year
A
B
C
D
E
F
5/03/2021
5/03/2021
5/03/2021
5/03/2021
5/03/2021
5/03/2021
5/03/2025
5/03/2025
5/03/2025
5/03/2025
5/03/2025
5/03/2025
-
-
-
-
-
-
4,375,000
4,375,000
4,375,000
900,000
900,000
900,000
-
-
-
-
-
-
Rights
Vested
at 31 March
2021
-
-
-
-
-
-
Rights
Unvested
at 31 March
2021
4,375,000
4,375,000
4,375,000
900,000
900,000
900,000
Valuation of the performance rights was undertaken with the following factors and assumptions being used
in determining the fair value of each right on the grant date.
Class
Grant Date
Period
(years)
Valuation
per right
US$
Performance Rights
Probability
Vesting Conditions
A
5/03/2021
4
$0.0377
100%
B
5/03/2021
4
$0.0346
100%
C
5/03/2021
D
E
F
5/03/2021
5/03/2021
5/03/2021
4
4
4
4
$0.0322
100%
$0.0508
100%
$0.0508
100%
$0.0508
100%
10-day VWAP of shares being greater than
A$0.15 per share.
The holder remains employed or engaged with
the Company for 12 months.
10-day VWAP of shares being greater than
A$0.20 per share.
The holder remains employed or engaged with
the Company for 18 months.
10-day VWAP of shares being greater than
A$0.25 per share.
The holder remains employed or engaged with
the Company for 24 months.
The holder remains employed or engaged with
the Company for 12 months.
The holder remains employed or engaged with
the Company for 18 months.
The holder remains employed or engaged with
the Company for 24 months.
TREK METALS LIMITED | ANNUAL REPORT 2021
48
Grant Date
Expiry Date
Performance Rights
Class
5 March 2021
5 March 2021
5 March 2021
5 March 2021
5 March 2021
5 March 2021
5 March 2025
5 March 2025
5 March 2025
5 March 2025
5 March 2025
5 March 2025
Class A
Class B
Class C
Class D
Class E
Class F
Expenses arising from share-based payment transactions:
Total
Valuation
US$
164,893
151,487
140,763
45,711
45,711
45,711
Expense
recorded to 31
March 2021
US$
11,746
7,201
5,013
3,256
2,173
1,628
Total expenses arising from share-based payment transactions recognised during the period as follows:
Expensed to Equity (shares issue costs)
Options issued to directors and brokers
Expensed to Statement of Profit or Loss
Options issued to key management personnel
Options issued to staff and consultants
Performance Rights issued to key management personnel
Performance Rights issued to staff and consultants
Total Share based payments expense
NOTE 23: SALE OF SUBSIDIARIES
(a) Gain on Sale of Subsidiary (2020)
2021
US$
2020
US$
82,734
82,734
-
6,484
21,906
9,111
37,501
120,235
13,401
13,401
40,262
16,752
-
-
57,014
70,415
On 15 April 2019, the Company announced the divestment of the Kangaluwi Copper Project (KCP) in
Zambia via the sale of its wholly owned subsidiary, Mwembeshi Resources (Bermuda) Limited (MRBL)
which ultimately held the KCP.
The Trek Group fully impaired the value of the asset in previous financial years whilst waiting for
written judgement from the Lusaka High Court on the validity of the mining license originally issued
by relevant government departments in Zambia. This decision is still pending after nearly 5 years.
Total consideration received for the sale was A$1.1 million. All debentures, charges and mortgages
on the KCP have been released with payment due to third parties, for this release, of approximately
A$950k. The remaining A$150k was received by TKM for the transfer of 100% of the shares in MRBL.
The divestment removes all ongoing liabilities, royalties, holding and legal costs associated with the
KCP and associated subsidiaries from the Trek Group.
The financial impact is summarised as follows:
Revenue from sale of subsidiaries
Cost on release of debentures, charges and mortgages
Net cash received on sale
Forgiveness of liabilities
Foreign currency translation reserve gains
Gain on disposal of subsidiary
31 MAR 2020
US$
786,258
(652,594)
133,664
28,211
172,234
334,109
TREK METALS LIMITED | ANNUAL REPORT 2021
49
(b)
Loss on Sale of Subsidiary
On 16 December 2019, Select Exploration (Europe) was dissolved, with Trek Metals Limited taking
over all assets and assuming all liabilities at that date.
The original value of the investment by Select Exploration (Europe) (SEE) in Select Exploration
Mauritius (SEM) of $400,000 was derecognised on completion of the sale of the investment in SEM
to ELM Resources for $20,000.
SEE had a receivable from Trek Management Pty Ltd of $20,000, which was also derecognised on
completion of the sale, resulting in the $380,000 loss on sale, per the table below.
The intercompany payable to Trek Metals by SEE of $431,902 was forgiven, as part of the dissolution.
Reversal of investment by SEE in SEM
Reversal of receivable from TMPL
Loss on sale
Debt forgiveness from TKM to SEE
Loss on disposal of subsidiary
31 MAR 2020
US$
400,000
(20,000)
380,000
(431,902)
(51,902)
NOTE 24: POST-BALANCE SHEET EVENTS
On 20 April 2021, the Company issued 100,000 fully paid ordinary shares in the capital of the
Company pursuant to the exercise of unlisted options.
Other than described above, no other matters or circumstances have arisen since the end of the
financial year which significantly affected or may significantly affect the operations of the Group, the
results of those operations, or the state of affairs of the Group in subsequent financial years.
NOTE 25: REMUNERATION OF AUDITORS
Audit or review of the financial report
Other Non-audit services
31 MAR 2021
US$
25,459
925
31 MAR 2020
US$
20,176
-
26,384
20,176
The auditor of Trek Metals Limited is Bentleys (WA) Pty Ltd. The auditor provided minor non-audit
services during the year US$925 (2020: US$Nil).
TREK METALS LIMITED | ANNUAL REPORT 2021
50
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 31 MARCH 2021
The Directors declare that:
a)
b)
c)
d)
in the directors’ opinion, there are reasonable grounds to believe that the company will be
able to pay its debts as and when they become due and payable;
in the directors’ opinion, the attached financial statements are in compliance with
International Financial Reporting Standards, as stated in Note 1 to the financial statements;
in the directors’ opinion, the attached financial statements and notes thereto are in
compliance with accounting standards and giving a true and fair view of the financial position
and performance of the consolidated entity; and
this declaration has been made after receiving a declaration to the directors by the Chairman
and Company Secretary.
On behalf of the Board
John Young
Executive Director
15 June 2021
TREK METALS LIMITED | ANNUAL REPORT 2021
51
Independent Auditor's Report
To the Members of Trek Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Trek Metals Limited (“the Company”) and its
subsidiaries (“the Consolidated Entity”), which comprises the consolidated statement of
financial position as at 31 March 2021, the consolidated statement of profit or loss and
other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion:
a.
the financial report of Trek Metals Limited presents fairly, in all material respects
the consolidated entity’s financial position as at 31 March 2021 and its financial
performance for the year then ended in accordance with Australian Accounting
Standards; and
b.
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1a.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about
whether the financial report is free from material misstatement. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Consolidated Entity in
accordance with the auditor independence requirements of the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the
Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independent Auditor’s Report
To the Members of Trek Metals Limited (Continued)
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key Audit Matter
How our audit addressed the key audit matter
Capitalised Exploration and Evaluation
Our audit procedures included but were not limited to:
Costs
Assessing management’s determination of its areas of
As disclosed in note 11 to the financial
interest for consistency with the definition in AASB 6
statements, the Group has incurred significant
Exploration and Evaluation of Mineral Resources
exploration and evaluation expenditures which
(“AASB 6”);
have been capitalised in accordance with the
requirement of Exploration for and Evaluation of
Confirming rights to tenure for a sample of tenements
held and confirming rights to tenure on tenements
Mineral Resources (AASB 6). As at 31 March
nearing expiry will be renewed;
2021, the Group’s capitalised exploration and
evaluation costs are carried at $1,560,805.
Testing the Group’s additions to capitalised exploration
costs for the year by evaluating a sample of recorded
expenditure for consistency to underlying records, the
The recognition and recoverability of
the
capitalisation requirements of the Group’s accounting
capitalised exploration and evaluation costs
policy and the requirements of AASB 6;
was considered a key audit matter due to:
By testing the status of the Group’s tenure and planned
The carrying value of capitalised exploration
future activities, reading board minutes and discussions
and evaluation
costs
represents a
with management we assessed each area of interest
significant asset of
the Group, we
for one or more of the following circumstances that may
considered it necessary to assess whether
indicate impairment of the capitalised exploration costs:
facts and circumstances existed to suggest
the carrying amount of this asset may
exceed the recoverable amount; and
The licenses for the rights to explore expiring in
the near future or are not expected to be renewed;
Substantive expenditure for further exploration in
Determining whether impairment indicators
the area of interest is not budgeted or planned;
exist
involves significant
judgement by
Decision or intent by the Group to discontinue
management.
activities in the specific area of interest due to lack
of commercially viable quantities of resources;
and
Data indicating that, although a development in
the specific area is likely to proceed, the carrying
amount of the exploration asset is unlikely to be
recorded in full from successful development or
sale; and
Assessing
the appropriateness of
the related
disclosures in the financial statements.
Independent Auditor’s Report
To the Members of Trek Metals Limited (Continued)
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Consolidated Entity’s annual report for the year ended 31 March 2021, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and for such internal control as the directors determine
is necessary to enable the preparation of the financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error. In Note 1a, the directors also state, that the financial report
complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain
reasonable assurance about whether the financial report as a whole is free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Independent Auditor’s Report
To the Members of Trek Metals Limited (Continued)
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Consolidated Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Consolidated Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Consolidated Entity to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Consolidated Entity audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
BENTLEYS
Chartered Accountants
CHRIS NICOLOFF CA
Partner
Dated at Perth this 15th day of June 2021
ADDITIONAL SECURITIES EXCHANGE
INFORMATION AS AT 1 JUNE 2021
STOCK EXCHANGE LISTING
Trek Metals Limited is listed on the Australian Securities Exchange. The Company’s ASX code is TKM.
SUBSTANTIAL SHAREHOLDERS (HOLDING NOT LESS THAN 5%)
The Company is incorporated in Bermuda as an exempted company and is subject to Bermudan Law.
It is not subject to Chapters 6, 6A, 6B and 6C of the Australian Corporations Act 2001 dealing with
the acquisition of shares (including substantial shareholdings and takeovers) and shareholders are
not required to provide written notifications relating to becoming a substantial holder, changes in
substantial holdings or ceasing to be a substantial holder.
There are currently no shareholders with a holding of more than 5%.
CORPOARTE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement is set out at
https://trekmetals.com.au/corporate/corporate-governance/
CLASS OF SHARES AND VOTING RIGHTS
There are 1,433 holders of 261,803,691 ordinary fully paid shares of the Company. The voting rights
attaching to the ordinary shares are in accordance with the Company’s Constitution being that:
a)
b)
c)
each Shareholder entitled to vote may vote in person or by proxy, attorney or
Representative;
on a show of hands, every person present who is a Shareholder or a proxy, attorney or
Representative of a shareholder has one vote; and
on a poll, every person present who is a shareholder or a proxy, attorney or Representative
of a shareholder shall, in respect of each fully paid Share held by him, or in respect of which
he is appointed a proxy, attorney or Representative, have one vote for the Share, but in
respect of partly paid Shares, shall, have such number of votes as bears the proportion which
the paid amount (not credited) is of the total amounts paid and payable (excluding amounts
credited).
There are no voting rights attached to the options or rights in the Company. Voting rights are only
applicable to the unissued ordinary shares when options or rights have been exercised. There is no
current on-market buy-back.
DISTRIBUTION OF SECURITY HOLDERS - SHARES
Number of Shares Held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of Shareholders
560
101
104
388
280
1,433
%
0.03
0.10
0.30
6.37
93.20
100
TREK METALS LIMITED | ANNUAL REPORT 2021
55
The number of shareholders holding less than a marketable parcel is 705 based on the closing price
of the Company’s shares of $0.07.
LISTING OF 20 LARGEST SHAREHOLDERS
Name of Ordinary Shareholder
Number of
shares held
% Shares
Held
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
11.
13.
14.
15.
16.
17.
18.
19.
20.
KALONDA PTY LTD
BIDDLE PARTNERS PTY LTD
MR ALEX JORDAN
FONT SF PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BOUCHI PTY LTD
MR SCOTT DOUGLAS AMOS + MRS KAREN ELIZABETH
AMOS
RATDOG PTY LTD
MR JOHN ALEXANDER YOUNG + MRS CHERYL KAYE
YOUNG
BNP PARIBAS NOMINEES PTY LTD
MR MARK JOHN BAHEN + MRS MARGARET PATRICIA
BAHEN
SLAM CONSULTING PTY LTD
GERNIE INVTS PTY LTD
ISIDORE 14 PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CHURCH STREET TRUSTEES LIMITED
GREENPOWER INVESTMENT LIFETIME SUPER FUND CT
PTY LTD
LONGREACH 52 PTY LTD
MR MICHAEL ALEXANDER EHRENBERG
STARCHASER NOMINEES PTY LTD AH & AMB SUPER
FUND A/C>
11,195,215
10,052,857
10,000,000
9,920,000
8,021,795
6,189,285
5,330,000
4,850,000
4,500,000
4,198,212
4,000,000
4,000,000
3,500,000
3,500,000
3,375,354
3,333,333
3,176,989
3,089,000
3,000,000
4.28
3.84
3.82
3.79
3.06
2.36
2.04
1.85
1.72
1.60
1.53
1.53
1.34
1.34
1.29
1.27
1.21
1.18
1.15
3,000,000
108,232,040
1.15
41.34
TREK METALS LIMITED | ANNUAL REPORT 2021
56
DISTRIBUTION OF SECURITY HOLDERS – UNQUOTED OPTIONS
a.) Unlisted Options expiring 2nd November 2021 @ $0.48
Number of Options Held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total 10,765,124
Holders greater than 20%
Number of holders
-
2
10
87
18
117
Name of Holder
N/A
Number Held
N/A
%
-
b.) Unlisted Options expiring 8th October 2021 @ $0.184
Number of Options Held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total 5,625,000
Holders greater than 20%
Name of Holder
Slam Consulting Pty Ltd
Number of holders
-
-
-
4
10
14
Number Held
1,250,000
%
22.22
c.) Unlisted Options expiring 5th March 2023 @ $0.10
Number of Options Held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total – 3,000,000
Holders greater than 20%
Number of holders
-
-
-
-
3
3
%
0.0
0.06
0.66
30.27
69.01
100
%
-
-
-
3.56
96.44
100
%
-
-
-
-
100
100
Name of Holder
Kalonda Pty Ltd